Tue | Feb 25, 2020

Crooks hatch elaborate card fraud schemes

Published:Sunday | May 19, 2019 | 12:44 AM

Even as credit and debit card fraud increases in Jamaica, incidence of the crime is massively under-reported, with a banking anti-fraud expert’s educated estimate of 5,000 victims a year being almost tenfold the 551 reported to the police Fraud Squad in 2018.

The industry is finding it increasingly difficult to curb electronic fraud in Jamaica, with schemers graduating from inserting reading and skimming devices in ABMs to paying sales clerks at merchant outlets as little as $10,000 daily to lift information from customers’ debit or credit cards.

“We know that in the case, especially of a debit card, if they capture your information and they use it to create a clone of your card, that, by itself, cannot be used to gain access to your account, they will need your PIN, but they also have means and ways of capturing your PIN,” said Lloyd Parchment, a fraud prevention manager. Parchment also co-chairs the Jamaica Bankers’ Association anti-fraud committee.

Sales clerks are equipped with skimming devices that capture information at a swipe. These devices can store the information of about 3,000 customers in a given day. When customers let their guard down, extracting the PIN, or personal identification number, is even easier to be captured.

“You can’t just look at somebody and say, ‘Oh, that person looks honest’, you can’t do that anymore. Recognising what is happening in the environment, you have to mistrust everybody, so at the restaurant, at the gas station, at the supermarket,” Parchment said.

“We had cases recently where pizza-delivery bike riders were tendering a device to you when you seek to pay for your pizza that you order and they deliver it. They tender a device to you which looks like the ordinary point-of-sale PIN pad or the ordinary point-of-sale (POS) machine, and it turned out it is a fraudulent device that is capturing your card information and your PIN,” he explained.

The use of dummy POS machines to skim customers information is a rising and troubling trend, Parchment told The Sunday Gleaner.

“Typically, how it operates is that if you go to a restaurant or wherever, and there is a collusive staff, and you tender them the card and they give you this machine, they swipe the card and ask you to enter your PIN. You enter your PIN, and, of course, it won’t work in terms of conducting the transaction, because it is a dummy, it is not connected to the bank’s network at all, but it captures the information,” he said.

The anti-fraud expert said that sales clerks generally suggest that the POS machine is not connecting, and offer to try another one.

“That is just to lull you into a false sense of security because you don’t realise that something has taken place,” he said.

According to statistics obtained from the Jamaica Constabulary Force Fraud Squad, point-of-sale fraud was the second most prevalent type of electronic fraud committed locally in 2018. ABM fraud was the most common.

“It has been happening a lot, and it still continues to happen. What the fraudsters start to do now is that instead of buying them online and bringing them in, they are going around and stealing the banks’ mobile point-of-sale machines and rigging them,” Parchment said.